ECONOMY

IOBE sees growth at 4%-4.3%

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The economy will grow by 4%-4.3% this year, according to the baseline scenario of the Foundation for Economic and Industrial Research (IOBE), undercutting the more optimistic forecasts for a 4.8% expansion by the government, 5% by the European Commission and 5.7% by the International Monetary Fund.

In its quarterly report presented on Thursday, IOBE also included two alternative scenarios, with the favorable one pointing to growth of 5%-5.3% and an adverse one that only sees a 0.5%-1% rise – this last one matches the scenario of the Organization for Economic Cooperation and Development, which projects growth at 0.9% this year.

Although the baseline scenario is the most likely, IOBE Director General Nikos Vettas said on Thursday that “none of them can be ruled out.”

The course of the pandemic, combined with the progress of vaccinations, and therefore the success of the new tourism season, will be the key factors for the economy. Even in its baseline scenario IOBE expects tourism revenues to come to 45%-50% of the record performance in 2019, compared with the government’s projection for 60% of the revenues in the bumper year. This scenario provides for the mild containment of the pandemic till the end of the second quarter, without a new spike.